Deardorffs' Glossary of International Economics

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E-commerce Moratoriium Moratorium on customs duties on electronic transmissions

e-Friction Index A measure and ranking of countries by "e-friction," defined by the Boston Consulting Group as "the factors that inhibit Internet access and use."

EAC East African Community

EADB East African Development Bank

EAEU Eurasian Economic Union

EAI Enterprise for the Americas Initiative

EAMS Euro Area Member States

EAR Export Administration Regulations

Early harvest A term, in trade negotiations, for agreeing to accept and implement the results of a portion of the negotiations before the rest of the negotiations are completed.

Earnings The total amount earned, usually by a worker as wages, or by a firm as profits.

Earth Summit Rio Summit.

EAS East Asia Summit.

East African Community "A regional intergovernmental organisation of 5 Partner States:" Burundi, Kenya, Rwanda, Tanzania, and Uganda. It was notified to the WTO as a customs union and aims to become a common market and a monetary union as well.

East African Development Bank "A leading Development finance institution with an overriding objective of promoting development in East Africa," EADB is a development bank for its five member countries: Burundi, Kenya, Rwanda, Tanzania, and Uganda.

East Asia Summit A meeting of the heads of state of 18 countries initiated by ASEAN to discuss issues of common interest. The first of these meetings was held in 2005 in Kuala Lumpur. It has met approximately annually in different locations within ASEAN.

East India Companies "East India Companies were European companies that conducted trade with Asia and within Asia in the 17th and 18th centuries." Best known and largest was the British East India Company, but there were many more, including French, Dutch, and others. [Source]

East India Company Incorporated by royal charter in 1600, this company had a monopoly for more than two centuries on international trade between England and countries of the far east: India, China, Persia, and Indonesia. In its later years it commanded a large private army to deter competitors and force contracts in its favor. [Source]

Easterlin paradox The finding by Easterlin (1974) that, while the happiness of high-income people is greater than that of low-income people, the same is not true, or not as true, for countries. Average happiness of countries rises much more slowly with average incomes, and the rate of increase declines income.

Easy money A monetary policy that is expansionary, thus with low interest rates for borrowing. Contrasts with tight money.

Eaton-Kortum Model The EK Model: A useful variant of the Ricardian Trade Model in which a continuum of producers or industries have randomly chosen differences in productivities. Due to Eaton and Kortum (2002).

EBITDA Earnings before interest, taxes, depreciation, and amortization of a firm. Sometimes used as an optimistic indicator of potential profitability.

EBRD European Bank for Reconstruction and Development.

EC European Communities

ECA (United Nations) Economic Commission for Africa

ECB European Central Bank

ECE (United Nations) Economic Commission for Europe

ECF Extended Credit Facility

ECFA Economic Cooperation Framework Agreement

ECHA European Chemicals Agency

ECIPE European Centre for International Political Economy

ECJ European Court of Justice

ECLAC Economic Commission for Latin America and the Caribbean

Eco The currency of the West African Economic and Monetary Union, in the process in 2020 of replacing the CFA franc.

Eco-dumping Environmental dumping

Eco-label A label that certifies that a product and its production meet high environmental standards. Such labeling is an alternative to the use of trade barriers to enforce such standards (see environmental protection argument). Examples are Green Seal in the US and Ecolabel in the EU.

Ecolabel See eco-label.

Econometric model A set of equations that have been estimated by econometric methods and that are then used, together, to forecast the economy or to calculate effects of changes in the economy. Thus, an economic model whose equations are econometrically estimated.

Econometrics The application of statistical methods to the empirical estimation of economic relationships. Econometric analysis is used extensively in international economics to estimate relationships of international trade, exchange rates, and international capital movements.

Economic and Monetary Union The currency area formed in 1999 as a result of the Maastricht Treaty. Members of the EMU share the common currency, the euro.

Economic and Social Commission for Asia and the Pacific Regional development commission of the United Nations that deals with Asia and the Pacific. It works in three main areas: poverty reduction; managing globalization; and tackling emerging social issues.

Economic and Social Commission for Western Asia Regional development commission of the United Nations that deals with Western Asia. Its purpose, like the other regional commissions, is to promote cooperation and integration among the countries in the region.

Economic and Social Council One of six main organs of the United Nations, established in 1945, ECOSOC links a "diverse family of entities" within the UN advancing aspects of sustainable development: economic, social, and environmental.

Economic and Trade Agreement The Phase One agreement between the US and China in January, 2020. Full name: Economic And Trade Agreement Between The Government Of The United States Of America And The Government Of The People's Republic Of China.

Economic appeasement Policy actions taken with the intent of improving living conditions among groups that may otherwise cause disruption, especially in foreign countries that might otherwise become threats to world peace. Term due to McDougall (1937). [Source]

Economic coercion As defined by the EU's Anti-Coercion Instrument, this "refers to a situation whereby a third country seeks to pressure the European Union or an EU Member State into making a particular choice by applying, or threatening to apply, measures affecting trade or investment."

Economic Commission for Africa (United Nations) Economic Commission for Africa

Economic Commission for Europe (United Nations) Economic Commission for Europe

Economic Commission for Latin America and the Caribbean One of five regional commissions of the United Nations, contributing to the economic and social development of Latin America and the Caribbean. Headquartered in Santiago, Chile. Established in 1948.

Economic Community of West African States A regional group of 15 member countries established in 1975 with the intent of economic integration. Notified to the WTO in 2005 as a customs union

Economic Complexity Ranking Rankings of the economic complexity of both products and countries, produced by the Observatory of Economic Complexity.

Economic contraction The downward phase of the business cycle, in which GDP is falling and unemployment is rising over time. Opposite of economic expansion.

Economic cooperation This could mean many things, including any of the many ways that countries work together in the economic sphere to achieve mutual objectives. Most commonly, it means reducing barriers to trade and international investment and pursuing means to encourage economic growth.

Economic cooperation agreement Sometimes used for an agreement that includes a free trade agreement but goes beyond that to include agreements regarding investment. [Source]

Economic Cooperation Framework Agreement A 2010 deal between China and Taiwan "that allowed cross-strait trade to grow." [Source]

Economic cost The monetary cost of an object or action, including reductions in wages, profits, and property values, but not including such nonmonetary costs as adverse consequences for health or safety, or negative effects on others.

Economic crisis Although there are many economic events that might be called crises, this term usually refers to a sudden drop in aggregate demand that, if prolonged, leads to recession.

Economic decision A decision about an economic issue, most commonly about how to allocate resources among multiple purposes.

Economic development Sustained increase in the economic standard of living of a country's population, normally accomplished by increasing its stocks of physical and human capital and improving technology.

Economic efficiency The extent to which a given set of resources is being allocated across uses or activities in a manner that maximizes whatever value they are intended to produce, such as output, market value, or utility. Contrasts with engineering efficiency, which focuses within a single activity on the output it produces per unit input.

Economic expansion The upward phase of the business cycle, in which GDP is rising and unemployment may be falling over time. Opposite of economic contraction.

Economic exposure Same as exchange rate exposure.

Economic factor Any of the considerations that are relevant to a decision and that involve economic variables, such as prices and wages.

Economic freedom Freedom to engage in economic transactions, without government interference but with government support of the institutions necessary for that freedom, including rule of law, sound money, and open markets.

Economic Freedom Index A measure and index of economic freedom in the countries of the world, produced by the Heritage Foundation.

Economic geography 1. The study of the determinants and effects of the spatial distribution of economic activity.
2. See New Economic Geography.

Economic growth The increase over time in the capacity of an economy to produce goods and services and (ideally) to improve the well-being of its citizens.

Economic indicator A variable that is measured and publicly reported, and that is considered meaningful not only for itself but as a sign of how rapidly the larger economy is expanding or contracting.

Economic integration See integration.

Economic interdependence The extent to which economic performance (GDP, inflation, unemployment, etc.) in one country depends positively or negatively on performance in other countries.

Economic justice 1. Fairness and equity in economic affairs, presumably by having laws, governments, and institutions that treat people equally and avoid favoring particular individuals or groups.
2. As most often used, the term carries a connotation that economic justice can only be achieved by lessening the power and changing the practices of international financial institutions, transnational corporations, and rich-country governments.

Economic migrant A person who relocates to another country in order to benefit from better economic conditions there, such as a higher wage.

Economic model A collection of assumptions, often expressed as equations relating variables, from which inferences can be derived about economic behavior and performance.

Economic nationalism A preference for supporting a country's own firms, industries, and workers -- and, in the case of firms and other assets, keeping them owned within the country -- even at the expense of the economic gains that could be had from trade and international investment.

Economic partnership agreement 1. A free trade agreement.
2. An agreement negotiated between the European Union and a developing country -- especially members of the ACP Countries -- to form free trade areas and otherwise assist them in their development.

Economic Policy Institute A US think tank whose purpose is too "include the needs of low- and middle-income workers in economic policy discussions." It is often critical of trade liberalization and FTAs such as NAFTA.

Economic populism Economic policies that emphasize growth and redistribution while ignoring the associated economic risks and constraints.

Economic profit Revenue from an activity minus the opportunity cost of the resources used in that activity.

Economic rate of return The net benefits to all members of society, as a percentage of cost, taking into account externalities and other market imperfections.

Economic relations Economic activity that involves participants from two countries, most obviously trade but possibly other forms as well. Some pairs of countries that have essentially no political relations nonetheless have economic relations.

Economic rent See rent.

Economic sanction The use of an economic policy as a sanction.

Economic slump Recession or a slowing of the rate of economic growth that comes close to being a recession.

Economic statecraft "The use of economic means to pursue foreign policy goals. Foreign aid, trade, and policies governing the international flow of capital can be used as foreign policy tools and are considered the most common forms of economic statecraft." [Origin] [Source]

Economic Strategy Institute Self-described was a "private, non-profit, non-partisan public policy research organization dedicated to assuring that globalization works with market forces to achieve maximum benefits rather than distorting markets, and imposing costs." Outlet for the views Clyde Prestowitz, its president, and as of 2024 seemed to be closed.

Economic structure The major features of a country or region's economy, including what and how much it produces and trades, and how it spends its income.

Economic summit A meeting, usually of government leaders, to discuss economic conditions and policies. In the international context, these are most prominently the meetings of heads of state of the G-20 or, previously, the G-7 or G-8.

Economic union A common market with the added feature that additional policies -- monetary, fiscal, welfare -- are also harmonized across the member countries.

Economic variable Any economic magnitude the size of which may change and is subject to explanation by an economic model. Examples are endless, including consumption, the price of a good, the exchange rate, the tax receipts of a government, the number of children per family, etc.

Economic vulnerability The extent of a country's exposure to lost sales and especially lost supplies of needed products due to changes in foreign markets and foreign policies. Vulnerability rises with increased openness, but depends (negatively) also on diversification and on the political relations a country has with its trading partners.

Economic war Economic warfare is the use of the economic weapon by countries either instead of or along with military action. It includes blockades, boycotts, embargoes, and sanctions.

Economic weapon 1. Term sometimes used for any economic action or policy that is intended to harm another. Acknowledging the beggar thy neighbor property of import tariffs, the term is sometimes applied to them.
2 As the economic weapon policy that is meant either to harm an enemy country by cutting off their access to supplies of needed imports or markets for essential exports, such as by sanctions, or that is meant to assist an allied country by providing it necessary resources, goods, or weapons. [Origin] [Source]

Economic welfare See welfare.

Economies of agglomeration Agglomeration economies

Economies of scale Increasing returns to scale.

Economies of scope The property that a firm's average cost falls as it produces a larger number of different products.

Economist, The A weekly newsmagazine (which calls itself a newspaper), published in the United Kingdom but distributed worldwide. Since it was established in 1843, it has been a champion of free trade.

Economist Intelligence Unit A "sister publication" of The Economist, it provides data and analysis on countries and industries of the world.

Economy A large group of economic agents, including consumers, firms, and perhaps governments, who engage in selling and buying the goods and services that they produce and consume. Usually associated with a country or other political and/or geographic unit.

ECOSOC United Nations Economic and Social Council

ECOWAS Economic Community of West African States

ECR Economic Complexity Ranking

ECSC European Coal and Steel Community

ECU, ecu 1. European Currency Unit
2. The "ecu" was an alternative name for the euro. [Source]

Eden-Rayneval Treaty of 1786 The Anglo-French Commercial Treaty of 1786 to reduce tariffs and other commercial restrictions by England and France on each other's exports and other interactions. It was in operation only from May 1787 to January 1793. [Source]

Edge Act A 1919 amendment to the US legislation creating the Federal Reserve allowing it to charter corporations to engage in international banking. Such corporations were called Edge Act Corporations or just Edges. The name is that of the bill's sponsor. [Source]

Edgeworth-Bowley Box A geometric device showing allocations of 2 goods to 2 consumers in a rectangle with dimensions equal to the quantities of the goods. Preferences enter as indifference curves relative to opposite corners of the box, tangencies defining efficient allocations and the contract curve. This and the Edgeworth production box are often called just the Edgeworth Box. [Origin]

Edgeworth Box See Edgeworth-Bowley Box and Edgeworth production box.

Edgeworth Production Box A variation of the consumption Edgeworth Box that instead represents the allocations of 2 factors to 2 industries for use in production functions. Efficient allocations now appear as tangencies between isoquants, while the contract curve becomes the efficiency locus.

EDP Excessive deficit procedure

EEA European Economic Area

EEC European Economic Community

EEU Eurasian Economic Union

EF Education First Founded in Sweden in 1965, this organization believes that "the world is better when people try to understand one another." Its programs include academic study, educational travel, language learning, and cultural exchange. It produces the English Proficiency Index.

Effect a transfer See transfer problem.

Effect of trade This term normally refers, often only implicitly, to the effect of a change in some policy or other exogenous variable that will increase the quantity of trade. Since in trade models, trade itself is endogenous, the effects associated with a change in trade depend on what caused it.

Effective exchange rate An index of a currency's value relative to a group (or basket) of other currencies, where the currencies in the basket are given weights based on the amount of trade between the countries that use the currencies. Also called a trade-weighted exchange rate.

Effective protection The concept that the protection provided to an industry depends on the tariffs and other trade barriers on both its inputs and its outputs, since a tariff on inputs raises cost. Measured by the effective rate of protection.

Effective protective rate Same as effective rate of protection.

Effective rate of protection A measure of protection provided to an industry by the entire structure of tariffs, taking account of tariffs on inputs as well as on outputs. Letting b_ij be the share of input i in the value of output j, and t_k be the tariff on good k, k=i,j, the ERP of industry j is ERP_j = (t_j−Σ_ib_ijt_i)/(1−Σ_ib_ij). Due to Corden (1966).

Effective tariff 1. Effective rate of protection.
2. The tariff actually applied to another country's exports if it is not the MFN tariff, as in the case of a preferential tariff.

Efficiency See economic efficiency.

Efficiency effect The [Source] of gain from trade associated with comparative advantage: undistorted trade leads to more efficient allocations in both production and consumption. Trade confronts producers and consumers with prices more accurately reflecting true costs, who then choose least-cost combinations of factors and goods.

Efficiency locus The set of efficient allocations in an Edgeworth production box. It is usually a curve, similar to a contract curve, and in fact is sometimes called that.

Efficiency loss In economics, efficiency loss usually refers to the reduction in economic welfare due to a market imperfection or distortion. The deadweight loss due to a tariff is a good example of an efficiency loss.

Efficiency unit A unit of a factor, usually labor, with the same productivity as some benchmark. Thus, if country A has L_A units of labor that are only 1/4 as productive as labor in country B, then using B's labor as benchmark, A has only L_A/4 efficiency units of labor. The assumption of equal productivity can then be used.

Efficient allocation An allocation that it is impossible unambiguously to improve upon, in the sense of producing more of one good (or more utility for one consumer) without producing less of another (or for another consumer).

Efficient breach The violation of a rule or law when the benefit to the violator of doing so exceeds the harm that it does to others. It is argued that a system of rules, such as the GATT and WTO, should allow for efficient breach by, perhaps, allowing violation of its rules in return for compensation of those who are harmed.

Efficient capital market An asset market in which, at a minimum, current price changes are independent of past price changes, or, more strongly, price reflects all (publicly) available information. Some believe foreign exchange markets to be efficient, which in turn implies that future exchange rates cannot profitably be predicted.

Efficient market Efficient capital market

Efficient quantity In a market with undistorted supply and demand, the quantity at which the supply price equals the demand price. That quantity is efficient, because supply price is the marginal cost and demand price the marginal benefit of an additional unit.

EFSF European Financial Stability Facility

EFTA European Free Trade Association

EGF European Globalisation Adjustment Fund

EGI Essential Goods Initiative

EIB European Investment Bank

EIF Enhanced Integrated Framework

EITI Extractive Industries Transparency Initiative

EIU Economist Intelligence Unit

EK Model A class of trade models based on Eaton and Kortum (2002), in which countries' productivities for a continuum of goods are determined stochastically.

Elastic Elasticity greater than one. For price elasticity of demand, it means expenditure rises as price falls. For income elasticity it means expenditure share rises with income, a superior good. Contrasts with inelastic and unit elastic. Elastic demand for exports or imports is sufficient for the Marshall-Lerner condition.

Elastic offer curve An offer curve along which import demand is always elastic. It is therefore not backward bending. Contrasts with inelastic offer curve.

Elasticities approach 1. The method of analyzing determination of the balance of trade, especially due to a devaluation, that focuses on the price elasticities of exports and imports. According to this approach, the effect depends critically on the Marshall-Lerner Condition.
2. The explanation of exchange rates using supply and demand curves.

Elasticity A measure of responsiveness of one economic variable to another -- often responsiveness of quantity to price along a supply or demand curve -- comparing percentage changes (%Δ) or changes in logarithms (d ln). The arc elasticity of x with respect to y is ε = %Δx/%Δy. The point elasticity is ε = d lnx/d lny = (y/x)(dx/dy).

Elasticity of demand for exports This is normally the price elasticity of demand for exports of a country, either for a single industry or for the aggregate of all imports. Equals the rest of the world's elasticity of demand for imports from that country, which therefore also enters the Marshall-Lerner condition.

Elasticity of demand for imports This is normally the price elasticity of demand for imports of a country, either for a single industry or for the aggregate of all imports. The latter plays a critical role in determining how the country's balance of trade responds to the exchange rate. See Marshall-Lerner condition.

Elasticity of reciprocal demand for imports In the context of a two-good, two-country trade model depicted by offer curves, this is the elasticity of the quantity demanded of imports, M, with respect to the quantity supplied of exports, X: (X/M)(dM/dX)

Elasticity of substitution The elasticity of the ratio of two inputs to a production (or utility) function with respect to the ratio of their marginal products (or marginal utilities). With competitive demands, this is also the elasticity with respect to their price ratio. For example, with factors L,K and factor prices w,r, the elasticity of substitution of a production function F(K,L) is σ = (wL/rK)d(K/L)/d(w/r).

Elasticity of trade An elasticity measuring the responsiveness of overall international trade to changes in trade frictions. [Source]

Elasticity of transformation The elasticity of an economy's output of one good with respect to its output of another along its transformation curve (holding other outputs, if there are any, constant).

Elasticity pessimism The view that elasticities of demand for imports are sufficiently small that the Marshall-Lerner Condition will be violated. See Machlup (1950).

Elasticity puzzle International elasticity puzzle

Electricity interconnector "High-voltage land and subsea cables that connect the electricity systems of neighbouring countries," allowing them to trade surplus energy. [Source]

Electronic commerce In the WTO's work program on this topic, begun in 1998, this was "understood to mean the production, distribution, marketing, sale or delivery of goods and services by electronic means." [Source]

Elephant curve The graph of world income growth across the income distribution published by Lakner and Milanovic (2013), resembling an elephant with a U-shaped trunk. In 1988-2008 income grew most rapidly for middle and highest incomes, less rapidly for lower incomes, and least rapidly for upper-middle incomes. [Source]

EMA European Monetary Agreement

Embargo The prohibition of some category of trade. May apply to exports and/or imports, of particular products or of all trade, vis a vis the world or a particular country or countries.

Embargo Act of 1807 Signed by President Jefferson in 1807, this prohibited American ships from trading in all foreign ports. Motivation was attacks by warring Britain and France on neutral US ships, plus British impressment of US sailors. Embargo against other than Britain and France ended with the 1809 Non-intercourse Act. [Source]

Embedded liberalism The term introduced by Ruggie (1982) to describe a system in which the values of liberalism -- especially free trade and free capital markets -- were adopted along with social policies intended to assist and partially compensate those who would be harmed by the liberal policies.

Embraer-Bombardier dispute A long-standing dispute between Brazil and Canada regarding subsidies paid to the Canadian maker of airplanes, Bombardier, which disadvantage the Brazilian maker, Embraer. Brazil filed the case in the WTO in 2017, but withdrew it in February 2021 after Embraer shifted its focus to business aviation. [Source]

Emergency Economic Powers Act The International Emergency Economic Powers Act

Emergency Quota Act of 1921 "The first immigration law in the United States to establish an immigration quota system based on national origins." "The 1921 Act did not have the impact its advocates hoped for, leading to a more extreme bill in 1924," the Johnson-Reed Act. [Source]

Emergency Tariff Act of 1921 Said to be a stopgap measure awaiting passage of the Fordney-McCumberTariff of 1922, this raised tariffs on a number of products, was vetoed by President Wilson in his final days in office, then passed again and signed by President Harding. [Source]

Emerging economy 1. Originally this term was applied to countries that had recently ceased to be part of the Soviet Union and its satellites, and thus emerging from centrally planned communist economies. The term drew attention to their transition to becoming market economies.
2. Rather quickly, perhaps acknowledging the importance of central planning and the failure of markets in many other countries, the term has expanded to encompass also developing countries, not necessarily ever communist, as they expanded the role of markets.

Emerging market 1. Term coined in the early 1980s by World Bank economist Antoine van Agtmael to describe "economies with low-to-middle per capita income" (according to Financial Times Oct 20, 2006). [Origin]
2. Same as emerging economy.
3. The securities market of an emerging economy.

EMI European Monetary Institute

Emigration The migration of people out of a country.

Emissions trading system A requirement that firms and other emitters of greenhouse gases limit their emissions to the amount of allowances that they have been issued, but that they can save or sell to others in participating countries if they do not use them.

Empire free trade Imperial preference [Source]

Empire Marketing Board A British government body founded May 1926 to promote imports from members of the British Empire and to do research to "improve the quality, storage and distribution of British and colonial produce." It ceased to exist in 1933, due to budget cuts and the introduction of Imperial Preference. [Source]

Empirical finding Something that is observed from real-world observation or data, in contrast to something that is deduced from theory.

Employment People working for pay or in a family-owned enterprise or farm. Much more specific definitions are used for measuring employment by national statistical agencies such as the US Bureau of Labor Statistics. Contrasts with unemployment.

Employment argument for protection The use of a tariff or other trade restriction to promote employment, either in the economy at large or in a particular industry. This is a second best argument, since other policies -- such as a fiscal stimulus or a production subsidy -- could achieve the same effect at lower economic cost.

EMS European Monetary System

EMTA Trade Association for the Emerging Markets

EMU Economic and Monetary Union

Enabling Clause The decision of the GATT in 1979 to give developing countries special and differential treatment, thus permitting the Generalized System of Preferences, which would otherwise be a violation of the GATT's most favored nation principle.

Endangered Species Convention Convention on International Trade in Endangered Species of Wild Fauna and Flora

Endogeneity 1. The state of being endogenous
2. A cause for concern when a regression attempts to explain one thing with another, if the latter may itself be caused in part (thus endogenous to) the former.

Endogenous 1. Something that depends on other things, which should be taken into account in an analysis.
2. Endogenous variable

Endogenous growth Economic growth whose long-run rate depends on behavior and/or policy.

Endogenous protection Protection that is explained as the outcome of economic and/or political forces. See political economy of protection.

Endogenous variable An economic variable that is determined within a model. It is therefore not subject to direct manipulation by the modeler, since that would override the model. In trade models, the quantity of trade itself is almost always endogenous. Contrasts with exogenous variable.

Endowment The amount of something that a person or country simply has, rather than their having somehow to acquire it. In the H-O Model of trade theory, endowments refer to primary factors of production, ignoring the fact that some of them -- especially capital and skill -- are deliberately accumulated.

Endowments Paradox The finding by Leamer (1984) that, under the assumptions of the HOV Theorem, developed countries are scarce in almost all factor endowments while developing countries are abundant in almost all. Given this name by Trefler (1995)

Enemy 1. See natural enemy.
2. See Trading with the Enemy Act.

Energy crisis A large reductions in the availability of the resources used to produce energy, such as oil and natural gas, and/or a rise in their price.

Energy Crisis of the 1970s The energy crises that occurred in 1973 and 1979. The US responded to the Yom Kippur War by helping Israel. This prompted OAPEC to produce less oil and embargo the US and the Netherlands. The second oil shock occurred when revolution in Iran caused its oil output to drop and prices to rise further. [Source]

Engine of growth Term sometimes used to describe the role that exports may have played in economic development, both of some of the regions of recent settlement in the 19th century and of the more recent NICs. Due to Robertson (1938).

Engineering See tariff engineering.

Engineering efficiency See economic efficiency.

English Proficiency Index An index of ability to use in the English language in many countries based on "test data from more than [two million] test takers around the world." It is a project of EF Education First.

Enhanced Integrated Framework EIF "is the only multilateral partnership dedicated to assisting least developed countries (LDCs) use trade as an engine for growth, sustainable development and poverty reduction."

Entangled mercantilism Term by Gulotty (2020) for "international commercial politics, where national interests flow through the global production networks operated by MNCs. (p. 5)" Rgulatory and commercial policies "restrict competition in favor of large foreign firms at the expense of small foreign firms and consumers. (p. 42)"

Enterprise A firm.

Enterprise for the Americas Initiative 1. Begun in June 1990 under US President H. W. Bush, this intended to create a FTA covering most of the Western Hemisphere, and to promote FDI and debt relief. The trade objective was succeeded by the planned FTAA.
2. The EAI now is a program for providing assistance to Latin America within USAID.

Enterprise zone 1. A location that is granted special treatment (such as lower or zero taxes) by government in order to encourage economic activity.
2. An export processing zone.

Entity list Maintained by the US Commerce Department, this is "a list of names of certain foreign [persons, businesses, and other organizations] that are subject to specific license requirements for the export, reexport and/or transfer (in-country) of specified items."

Entrepôt trade The import and then export of a good without further processing, usually passing through an entrepôt which is a storage facility from which goods are distributed. See re-exports.

Entrepreneur A person who starts a business.

Entrepreneurship The talent, knowledge, and willingness to engage in new activities, especially those that may result in new kinds of firms.

Entrepreneurship ranking A survey-based ranking of countries by U. S. News based on global perceptions of characteristics: "connected to the rest of the world, educated population, entrepreneurial, innovative, provides easy access to capital, skilled labor force, technological expertise, transparent business practices, well-developed infrastructure, well-developed legal framework."

Entry barrier A natural or artificial impediment to a firm beginning to operate in an industry. Entry barriers give a first mover advantage to firms already in an industry, and these are often national firms in competition with potential foreign entrants.

Entry writer An employee of a customs brokerage whose job is to prepare customs declarations, including finding the correct tariff treatment of an imported good by identifying its proper classification.

Envelope The outermost points traced out by a moving curve, as, for example, the Baldwin envelope.

Envelope theorem The result that the derivative of an objective function with respect to a parameter equals its partial derivative evaluated at the optimum, ignoring effects of the parameter on endogenous arguments. That is, if V(a) = max_xF(x,a), then dV/da=∂F/∂a.

Environmental dumping Export of a good from a country with weak or poorly enforced environmental regulations, reflecting the idea that the exporter's cost of production is below the true cost to society, providing an unfair advantage in international trade. Also called eco-dumping.

Environmental Kuznets Curve An inverse-U-shaped relationship hypothesized between per capita income and environmental degradation. Named after the Kuznets Curve dealing with inequality. Idea due to Grossman and Krueger (1993).

Environmental protection argument for a trade intervention The view that trade should be restricted in order to help the environment. Examples include embargos on imports made from endangered species, limits on imports produced by methods harmful to the atmosphere, and restrictions on investment into locations with lax environmental standards. Usually a second best argument.

Environmental subsidy A subsidy intended for environmental purposes. A subsidy for adapting existing facilities to new environmental laws or regulations is non-actionable under WTO rules.

Environmental standard A rule or regulation intended to protect or improve the environment, including the quality of air, water, and land and the health of animals and plants.

Environmental trade policy The use of trade policies for environmental purposes.

Eonia Euro OverNight Index Average. The interest rate that banks in the euro zone charge each other on 1-day loans. Thus the 1-day euribor rate.

Eora Eora is a MRIO covering 190 countries (as of February 2025) and including "matching environmental and social satellite accounts."

EoS Elasticity of substitution

EPA Economic partnership agreement.

EPC 1. European Policy Centre.
2. European Political Community.

EPI Economic Policy Institute.

ePing "An online alert mechanism to help businesses stay informed about changes in sanitary and phytosanitary measures (SPS) and technical barriers to trade (TBT) in international markets." "The project is a joint initiative of UNDESA, ITC and the WTO."

EPU European Payments Union.

EPZ Export processing zone.

Equalization 1. See factor price equalization.
2. See product price equalization.

Equation of Exchange M×V = P×Q, where M is the quantity of money in an economy, V is the velocity of money, P is the price level, and Q is the real output of the economy. The equation is true by definition because it implicitly defines velocity of money. It is central to the quantity theory of money.

Equilibrium 1. A state of balance between offsetting forces for change, so that no change occurs.
2. In competitive markets, equality of quantity supplied and quantity demanded.

Equilibrium exchange rate This is ambiguous, since there is no single agreed upon model of the exchange rate:
1. The exchange rate at which supply and demand for a currency are equal.
2. The exchange rate at which there is balance of payments equilibrium.
3. The exchange rate at which purchasing power parity holds, in some form.
4. The exchange rate at which the expected change in the exchange rate, in the near future, is zero.
5. The exchange rate at which the country's international reserves are neither rising nor falling.

Equilibrium level The value taken on by an economic variable in equilibrium, as opposed either to some other value, or to its rate of change.

Equilibrium position Same as equilibrium level, though perhaps of several variables at once, perhaps as displayed in a graph.

Equilibrium terms of trade The terms of trade at which the country's excess supply of each good to the world market equals the world market's excess demand. If the country is a small open economy, whose excess supplies and demands are therefore negligible for the world market, then this is simply calculated from given world prices.

Equity Share in the ownership of a corporation; more commonly called a stock, as in the stock market.

Equivalent quota The quota that sets the same level of imports that is entering a country under a tariff, or perhaps under some other NTB.

Equivalent tariff Tariff equivalent.

Equivalent variation The amount of money that, paid to a person, group, or whole economy, would make them as well off as a specified change in the economy. Provides a monetary measure of the welfare effect of that change that is similar to, but not in general the same as, compensating variation.

Era of Good Feelings The period in US history that began after the War of 1812 and the election of 1816, during which a single party, the Democratic-Republicans, dominated US politics and based policies on the objective of national economic development. These policies included high protective tariffs to support American manufactures.

ERM Exchange Rate Mechanism

ERM Crisis A currency crisis in the markets of the European Exchange Rate Mechanism, beginning in the summer of 1992. [Source]

ERM II See Exchange Rate Mechanism

Erosion See preference erosion

ERP Effective rate of protection

ERR Economic rate of return

Escalation 1. Regarding the structure of tariffs, see tariff escalation.
2. In the context of a trade war, escalation refers to the increase in tariffs that occurs as countries retaliate again and again.

ESCAP Economic and Social Commission for Asia and the Pacific.

Escape clause 1. The portion of a legal text that permits departure from its provisions in the event of specified adverse circumstances.
2. The U.S. statute (section 201, 1974 trade act) that permits imports to be restricted, for a limited time and on a nondiscriminatory basis, if they have caused injury to U.S. firms or workers. The escape clause accords with the Safeguards Clause (Article XIX) of the GATT.

ESCWA Economic and Social Commission for Western Asia.

ESM European Stability Mechanism.

Essential Goods Initiative A project of Global Trade Alert that collects information on trade and investment policies related initially to medical and food products but later expanded to include global value chain inputs, raw materials, feed, fertiliser and fuel.

Establishment In economic data such as from the BLS, an establishment is a single physical location mainly engaged one productive activity. While a firm may include only a single establishment, larger firms have many. [Source]

Ethical trade As used by the Ethical Trading Initiative, this term refers primarily to trade that conforms with high levels of labor standards, including the avoidance of child labor, forced labor, sweatshops, adverse health and safety conditions, and violations of labor rights.

Ethical Trading Initiative An alliance of multinational companies, nongovernmental organizations, and labor unions seeking to promote and identify ethical trade.

ETI Ethical Trading Initiative

ETIAS European Travel Information and Authorisation System

ETS Emissions trading system

ETSG European Trade Study Group

EU European Union

EU-Japan Economic Partnership Agreement A free trade agreement and economic partnership agreement concluded between the European Union and Japan July 17, 2018.

EU-speak Shorthand for terminology used in official documents and communication of the EU.

EU15 The 15 members of the European Union from 1995 through 2003, prior to its 2004 enlargement.

EU enlargement The process of taking more member countries into the EU.

EU values Values that "are common to the EU countries in a society in which inclusion, tolerance, justice, solidarity and non-discrimination prevail." The include human dignity, freedom, democracy, equality, rule of law, and human rights.

Euclidean space This is the mathematical context of most economic models: a space of all n-tuples of real numbers. Each point in that space is a vector, the elements of which can take on any values, positive, negative, or zero. In a 2-good trade model, for example, the trade vectors occupy 2-dimensional Euclidean space.

Euler's Theorem 1. The property of a function X=F(V), if it is homogeneous of degree N in its arguments V=(V₁,...,V_n), that Σ_iV_i∂F/∂V_i=NX.
2. The useful implication of this that, for a production function X=F(V) with constant returns to scale, the competitive payments to factors sum to the value of output: Σ_iw_iV_i=pX.

Eurasian Economic Union A customs union whose members include Russia and several of its neighbors.

Eurasian Landbridge The rail services for freight between the EU on the west and China and other locations in East Asia, which from 2011 greatly facilitated global supply chains connecting East Asia and Europe. One component of the Belt and Road Initiative.

Eurasian Roundabout The bypassing of sanctions on Russia by exporting to Russia's neighbors who then re-export to Russia.

Euratom The European Atomic Energy Community, created in 1956 along with the EEC.

Eureka "An organization that funds research and development collaborations to propel European technology clusters." It began in 1985 "as an agreement between 18 countries and the European Commission" but has expanded to 47 countries in Europe and beyond. [Source]

Euribor Stands for the Euro Interbank Offered Rate, a euro-denominated interest rate charged by large banks among themselves on euro-denominated loans. Analogous to LIBOR for the euro.

Euro The common currency of a subset of the countries of the EU, adopted January 1, 1999, with paper notes and coins put into circulation January 1, 2002. It is divided into 100 cents.

Euro Area Member States Countries that have adopted the euro; the euro zone.

Euro-Mediterranean Partnership A declaration at a 1995 conference in Barcelona between the 15 members of the European Union and its 12 Mediterranean partners to enter a new phase in their relationship, promoting peace and stability, free trade, and cultural understanding. Also called the Barcelona Process.

Euro Zone The countries of the EMU. That is, the group of European countries, members of the EU, that adopted the common currency, the euro. See baffling pigs.

Eurobond 1. A bond whose value is stated in a currency other than that of the country where it is issued, usually denominated in US dollars.
2. A proposal to issue bonds denominated in euros, suggested for dealing with the European sovereign debt crisis.

Euroclear This calls itself "one of the key global financial market infrastructures." Based in Brussels, it enables "the financing of the real economy by processing transactions safely and efficiently."

Eurocurrency See Eurodollar.

Eurodad European Network on Debt and Development

Eurodollar Originally referred to U.S. dollar-denominated deposits in commercial banks located in Europe. Over time, the term came to include deposits in a commercial bank in any country denominated in any currency other than that of the country. Now sometimes called eurocurrencies.

Eurogroup The group of finance ministers of the countries that have adopted the euro.

Europe 1992 An initiative, begun with the Single European Act in 1987 by the European Union, to fully integrate the markets of the member countries by the end of 1992. The process involved extensive harmonization of laws and regulations that would otherwise interfere with the cross-border movement of goods and services.

Europe à la carte A form of variable geometry in which countries may choose from a list of policies, like a menu, rather than all being required to adopt the same policies. [Source]

Europe Agreement An agreement between the EU and each of ten Eastern European countries (starting with Hungary and Poland in 1994) creating free trade areas and establishing additional forms of political and economic cooperation in preparation for these countries' eventual membership in the EU.

European Bank for Reconstruction and Development An international financial institution, founded in 1991 in response to the fall of the Berlin Wall, that supports primarily private-sector projects in countries from Central Europe to Central Asia. It is "owned by 65 countries, the European Union and the European Investment Bank."

European Border and Coastguard Agency Known as Frontex, this unit of the European Union is responsible for safeguarding the external borders of the EU.

European Central Bank The central bank of the Euro Zone.

European Centre for International Political Economy A research think tank founded in 2006 and focused on "trade policy and other international economic policy issues of importance to Europe."

European Chemicals Agency Founded June 1, 2007, ECHA is the agency of the EU that "implements the EU's chemicals legislation to protect ... health and the environment." It has "a mandate to register, test, and potentially ban the production of nearly every chemical in Europe." [Source]

European Coal and Steel Community An economic agreement in 1951 among six countries of Western Europe -- Belgium, France, Germany, Italy, Luxembourg, and the Netherlands -- that preceded formation of the EEC and ultimately the EU.

European Commission The highest decision-making body of the European Union. Serving as the executive of the EU, it consists of one Commissioner from each member country each representing the interests of the EU as a whole, and it proposes legislation and "ensures that EU law is correctly applied by member countries."

European Communities The name adopted in 1967 by the European Economic Community when it merged with the ECSC and Euratom. This name and the acronym EC was used until 1992 when it was replaced by European Union.

European Conformity See CE.

European Council A body, including the heads of state of the member countries of the EU, which "defines the EU's overall political direction and priorities." It also includes the European Council President and the President of the European Commission.

European Court of Justice The Court of Justice of the European Union (CJEU) "interprets EU law to make sure it is applied in the same way in all EU countries, and settles legal disputes between national governments and EU institutions."

European Currency Unit A composite currency that was a basket of most of the currencies of countries in the European Union as of 1999, when it was replaced by the euro. Conceived in 1979, it was used as a unit of account of the European Monetary System prior to the creation of the euro.

European Economic Area The group of countries comprised of the EU together with EFTA. The two groups have agreed to deepen their economic integration.

European Economic Community The customs union formed in 1958 by the Treaty of Rome among six countries of Europe: Belgium, France, Germany, Italy, Luxembourg, and the Netherlands; predecessor to the EC in 1967 and the EU in 1992.

European Financial Stability Facility A pool of funds created by the Euro Area Member States in 2010 as a temporary measure to be used to rescue member countries in crisis by lending to them. It was replaced in 2012 by the European Stability Mechanism.

European Free Trade Association A free trade area made up of countries in Europe that did not join the European Economic Community. EFTA was established in 1960 among Austria, Denmark, Norway, Portugal, Sweden, Switzerland, and the United Kingdom. As of 2025 it included Iceland, Liechtenstein, Norway, and Switzerland.

European Globalisation Adjustment Fund A program providing support for people in the European Union displaced by globalization. Funds are available for job search, retraining, relocation, and other assistance to workers whose jobs have been lost due to employers shutting down or relocating in response to international competition. Similar to TAA.

European Green Deal "A package of policy initiatives, which aims to set the EU on the path to a green transition, with the ultimate goal of reaching climate neutrality by 2050."

European Investment Bank The "long-term lending bank of the European Union." It supports projects within the member states as well as in countries that are working to become members states of the EU.

European Monetary Agreement An intergovernmental organization administered by the OECD that facilitated settlement of balance of payments accounts among its member states from 1958 to 1972. It replaced the EPU, and its functions were taken over by the IMF in 1972.

European Monetary Institute A temporary institution that existed from January 1994 to June 1998 during the years leading up to the European Central Bank and the introduction of the euro. It's purpose was to facilitate cooperation and coordination among the central banks of the EU and to pave the way for the shift to the euro.

European Monetary System A currency union formed by some of the members of the EEC in 1979 that continued, with changing membership, until replaced by the EMU and the euro in 1999.

European Network on Debt and Development A European network of NGOs working to reduce poverty and empower the poor in developing countries through improved economic and financial policies.

European Parliament The legislative body of the European Union. Members are directly elected every five years.

European Payments Union An international arrangement for settling payments among member countries in Europe during a period in which many of the countries' currencies were not convertible. The EPU functioned from 1950 to 1958, after which it was replaced by the EMA.

European Policy Centre "The European Policy Centre (EPC) is an independent, not-for-profit think tank dedicated to fostering European integration through analysis and debate."

European Political Community A new "platform" in 2022 to "bring together European leaders to discuss key issues affecting the European continent." It was proposed by French President Emmanuel Macron shortly after Russia invaded Ukraine.

European Recovery Program See Marshall Plan.

European single market See single market.

European sovereign debt crisis A crisis that began in 2009 with concerns that eurozone-member Greece might default on its sovereign debt. Interest rates rose on bonds of multiple eurozone countries, and markets feared the collapse of the euro. The crisis ended in 2012 with the ECB's promise to "do whatever it takes" to save the euro.

European Stability Mechanism A facility created by the Euro Area Member States in 2012 as a permanent mechanism to be used to rescue member countries in crisis by lending to them. It replaced the European Financial Stability Facility.

European Trade Study Group A group that meets annually for conferences on the economics of international trade.

European Travel Information and Authorisation System "A completely electronic system that allows and keeps track of visitors from countries who do not need a visa to enter the Schengen Zone." It is expected to be launched January 1, 2022.

European Union A group of European countries that have chosen to integrate many of their economic activities, including forming a customs union and harmonizing many of their rules and regulations. Preceded by EEC and EC. As of February, 2025, (after Brexit), the EU had 27 member countries.

European values 1. See EU values.
2. The objectives that the European Union seeks to include in trade agreements that are not directly related to international trade.

Eurostat The statistical office of the European Union, which provides statistics on economic and other variables at the level of the EU member countries.

Eurozone 1. The Euro Zone.
2. Pertaining to the Euro Zone or the euro.

Eurozone bonds Bonds denominated in euros.

Eurozone debt crisis The European sovereign debt crisis.

Even case In international trade models with multiple goods and factors, this is the special case of an equal number of goods and factors. It is convenient for analysis, because the matrix of factor input requirements is square and therefore potentially invertible.

Everything But Arms The name given by the EU to its decision in 2001 to eliminate quotas and tariffs on all products except arms from the world's poorest countries. As of February 2025, the beneficiaries included 47 countries.

Evian Group An international NGO composed of "corporate, government and opinion leaders, committed to fostering an open, inclusive, equitable and sustainable global market economy in a rules-based multilateral framework."

Ex ante Before the fact; that is, before some event has taken place.

Ex ante analysis Analysis of the effects of a policy, such as trade liberalization or formation of a PTA, based only on information available before the policy is undertaken. Also prospective analysis.

Ex factory Applied to a price, this means the price at the factory, and does not include any other charges, such as delivery or subsequent taxes.

Ex post After the fact; that is, after some event has taken place.

Ex post analysis Analysis of the effects of a policy, such as trade liberalization or formation of a PTA, based on information available after the policy has been implemented and its performance observed. Also retrospective analysis.

Ex post tariff Implicit tariff.

Ex works Ex factory.

Exact hat algebra See hat algebra.

Excepted Foreign State A country "whose firms are exempted from some onerous CFIUS rules." [Source]

Exception In a trade agreement, there may be exceptions for sensitive products.

Excess burden Same as deadweight loss and usually applied to a tax, as it represents the loss to those who are taxed in excess of the amount transfered to government. Measured by a Harberger triangle.

Excess demand Quantity demanded minus quantity supplied. Thus a country's demand for imports of a homogeneous good is its excess demand for that good.

Excess profit Profit of a firm over and above what provides its owners with a normal (market equilibrium) return to capital.

Excess supply Quantity supplied minus quantity demanded. Thus a country's supply of exports of a homogeneous good is its excess supply of that good.

Excessive deficit procedure The EU's tool to induce member countries to "correct excessive deficit and/or debt levels." If criteria are not met, "the EDP requires the country ... to provide a plan ... it will follow [and] deadlines for [its] achievement. Euro-area countries that [fail this] may be fined." [Source]

Exchange 1. To engage in trade, either within a country or internationally.
2. Foreign exchange.

Exchange appreciation See appreciation.

Exchange control Rationing of foreign exchange, typically used when the exchange rate is set by government and the central bank is unable or unwilling to enforce the rate by exchange-market intervention.

Exchange depreciation See depreciation.

Exchange economy See pure exchange economy.

Exchange equalization fund Also called an exchange equalization account, this is the unit within a government or central bank that manages a pegged exchange rate. It manages reserves of foreign currencies, which it uses to buy and sell domestic currency as needed to keep the exchange rate within specified bounds.

Exchange market 1. A term encompassing all places and mechanisms at and by which national currencies are exchanged for one another.
2. The the more narrowly defined actual exchange market, which exists primarily among large international banks. Others who wish to exchange currencies do it through these banks.
3. The theoretical representation of the exchange market as either the interaction of supply and demand arising from exchange-market transactions or as an asset market equilibrium between currencies.

Exchange market intervention Usually done by a country's central bank, this is the purchase and sale of the country's own currency on the exchange market in order to influence or fully determine its price. These transactions, unless they are sterilized, change the monetary base of the country and thus its money supply.

Exchange rate The price at which one country's currency trades for another, typically on the exchange market. Depending on context, it may be the price of either currency in terms of the other. A "country's exchange rate" may be the foreign currency price of its currency or the opposite. One must be careful.

Exchange rate anchor The use of a pegged exchange rate as a nominal anchor, intended to discourage monetary expansion and therefore inflation.

Exchange rate crisis A speculative attack on a country's currency, both caused by and causing loss of international reserves.

Exchange rate disconnect puzzle The name given by Obstfeld and Rogoff (2001) to "the exceedingly weak relationship (except, perhaps, in the longer run) between the exchange rate and virtually any macroeconomic aggregates."

Exchange rate determination The process by which a country's exchange rate comes to be what it is. With a floating exchange rate and without intervention, this may be modeled in various ways, including the elasticities approach, the monetary approach, the portfolio approach, and the asset approach.

Exchange rate exposure The extent to which the stock-market value of a firm varies with changes in exchange rates. Also called economic exposure.

Exchange Rate Mechanism 1. A system that was operated by some central banks within the European Union, which intervened in exchange markets to limit the fluctuations of their currencies relative to one another, while letting all of them collectively float.
2. ERM II is the successor to the original ERM and was set up in 1999 to reduce fluctuations in exchange rates of non-euro EU currencies with respect to the euro. Participation in ERM II for at least two years is required for countries before they can adopt the euro.

Exchange rate overshooting The response of an exchange rate to a shock by first moving beyond where it will ultimately settle. Thought to help explain exchange rate volatility, this was first modeled by Dornbusch (1976).

Exchange rate pass-through See pass-through.

Exchange rate protection Manipulation of the exchange rate to increase the domestic prices of foreign goods, and thus demand for domestic goods. Since an undervalued currency stimulates demand for all domestic tradable goods, such protection, unlike tariff protection, cannot be provided to individual industries.

Exchange rate regime The rules under which a country's exchange rate is determined, especially the way the monetary or other government authorities do or do not intervene in the exchange market. Regimes include floating exchange rate, pegged exchange rate, managed float, crawling peg, currency board, and exchange controls.

Exchange rate risk Exchange risk

Exchange rate stability Lack of movement over time in the exchange rate of a country.

Exchange rate system Exchange rate regime

Exchange rate target See target.

Exchange rationing See exchange control or ration foreign exchange.

Exchange regime See exchange rate regime.

Exchange risk Uncertainty about the value of a financial commitment due to uncertainty about a future exchange rate. Unless they cover themselves, traders, creditors, and debtors with future commitments to pay or receive foreign currency bear exchange risk. Contrasts with commercial risk and political risk.

Exchange stabilization fund A government institution sometimes used to handle exchange market intervention, charged with the explicit function of smoothing exchange rate fluctuations.

Excise subsidy A subsidy paid on production or sale (consumption) of a particular good.

Excise tax A tax on production or sale (consumption) of a particular good.

Exercise To execute the terms of a contract. See option.

Exhaustion 1. In intellectual property regimes, the transaction at which rights to control further distribution terminate, with implications for the legal potential for parallel imports. See national exhaustion and international exhaustion for details.
2. Product exhaustion

Exim Bank Export-Import Bank of the United States

Exogenous Coming from outside, usually in the context of an economic model, in which it means only that it is not explained within the model.

Exogenous growth Economic growth that occurs without being the result of deliberate policy or behavior. The term arises because neoclassical growth models converge to a steady state in which per capita income is constant over time. Growth, then, requires exogenous technical progress.

Exogenous variable A variable that is taken as given by an economic model. It therefore is subject to direct manipulation by the modeler. In most models, policy variables such as tariffs and par values of pegged exchange rates are exogenous. Contrasts with endogenous variable.

Exon-Florio Provision A 1988 US law empowering the president to stop a foreign acquisition of a US company (or a merger) if it threatens national security. An amendment to the Omnibus Trade and Competitiveness Act of 1988, it was sponsored by Nebraska Senator J. James Exon and New Jersey Representative James J. Florio.

Exorbitant privilege Term of Valéry Giscard d'Estaing in the 1960s for the US position in the international monetary system, the Bretton Woods System of currencies pegged to the US dollar. The US benefited then, and still does, as the issuer of the currency that most countries hold as international reserves.

Expansion Economic expansion

Expansionary Tending to cause aggregate output (GDP) and/or the price level to rise. Term is typically applied to monetary policy (an increase in the money supply or a decrease in interest rates) and to fiscal policy (an increase in government spending or a tax cut), but may also apply to other macroeconomic shocks. Contrasts contractionary.

Expectation The expectation of a variable is the same as its expected value, and is also used with both meanings.

Expected value 1. The mathematical expected value of a random variable. Equals the sum (or integral) of the values that are possible for it, each multiplied by its probability.
2. What people think a variable is going to be. In general, the expectation in this second sense may be more important than the first for determining behavior on a market, such as the exchange market.

Expenditure function A function representing the minimum expenditure needed, at a given price vector P, to achieve a given utility U from a vector of goods consumed X: E(P,U) = min_X{PX | U(X)≥U}. Useful for using its partial derivatives to conveniently represent quantities demanded.

Expenditure share The fraction of expenditure (usually consumer expenditure) that is spent on a particular good or purpose. With Cobb-Douglas preferences, expenditure shares are constant, independent of prices and income.

Experience good A product whose value can be better known after having consumed it. Producers of experience goods may temporarily charge a price lower than marginal cost to induce buyers to try the product. Done with an export, this would be legally considered dumping.

Exploit 1. To take advantage of someone or something for one's own benefit. Economists often use the term with a neutral or positive connotation, advocating that one should fully exploit one's resources for example.
2. Others see the term as quite negative, viewing exploitation as being done at the expense of others, which in some cases (e.g., monopsony, especially of labor) it is.

Export 1. A good that moves outward across a country's border for commercial purposes.
2. A product, which might be a service, that is provided to foreigners by a domestic producer.
3. To cause a good or service to be an export under definitions 1 and/or 2.

Export Administration Regulations The set of regulations on what may legally be exported from the United States, as published in the Federal Register and administered by the Bureau of Industry and Security.

Export bias Any bias in favor of exporting. Most often applied to growth that is based disproportionately on accumulation of the factor used intensively in the export industry and/or technological progress favoring that industry.

Export cartel A cartel of exporting countries or firms.

Export control Regulation or restriction of the export of certain goods, sometimes in order to limit access to the sensitive technologies they embody, sometimes to alleviate domestic shortages.

Export Control Act US legislation of July 2, 1940, authorizing the President to limit exports of basic materials needed for war. It was used initially to embargo certain exports to Japan, but was extended later to other countries. [Source]

Export credit A loan to the buyer of an export, extended by the exporting firm when shipping the good prior to payment, or by a facility of the exporting country's government. In the latter case, by setting a low interest rate on such loans, a country can indirectly subsidize exports.

Export Credits Arrangement Arrangement on Export Credits

Export credit insurance A program to guarantee payment to exporting firms who extend export credits.

Export diversion The effect of a preferential trade agreement if it causes a member to reduce exports to an outside country, exporting instead to a partner country. Defined and observed by Soloaga and Winters (2001).

Export dumping Selling a product for a lower price in the foreign market than at home, after taking account of the costs of exporting; thus simply dumping Due to Viner (1923).

Export duty Export tax

Export elasticity This could be any of several elasticities, including that of demand for, or supply of, a country's exports, either total or for particular products, with respect to particular prices or income.

in demand for a country's of a product relative to the exports of another country of that product, both to a particular importing country, with respect to the relative price of the two exporting countries' exports.